Student Loans discussion

silvercar

You only have to pay 9% of any earnings over £15,000. The loans given more recently do have a cut off age after which the loan is written off, so in these cases it would be unnecessary to make extra repayments if you think that some of your loan could be written off.

ashapala

Those who started from 2006 (who hadn't taken a gap year) have their loans written off 25 years after first repayment.

I have a big spreadsheet for working out everything about this new loan type, naturally it's dependant on loads of variables such as...
- what the rate is and will be in the future (3.8% atm)
- how much you earn
- how much savings you have
- how many additional repayments you make and of course...
- how much your loan was in the first place!

I'll finish with a loan of around £21000.
If over the following 25 years my average salary is £32000 and i have no savings, make no additional repayments and the rate stays as it is now(...) then i will pay off the loan in the 24th year. Having paid £38250 total.

The way it all works it seems geared up to expecting students to earn an average of £30000 over the 25 years of the repayment period. This is the amount that results in the most interest. Earn less, and the extra interest just gets written off. Earn more, and you'll finish paying sooner and so will amount less interest.

Oldernotwiser

gsf600y wrote: »

Is that actually true? Or should we keep paying it back like I feel we should?
If there is a salary limit, does it increase with inflation over the years?

Well, the salary limit went up from £10,000 to £15,000 a couple of years ago so it's likely to go up again at some point in the future. I rather agree with your wife that you don't pay back any more than you have to and that's certainly Martin's advice as well.